The shares of this leading logistics company are in focus after global brokerage house Jefferies slashed its target price by 37 percent, citing a weak outlook. In this article, we will discuss more about this in detail.
With a market capitalization of Rs 26,247 crores, the shares of Delhivery Ltd are currently trading at Rs 352 per share, down by 21.39 percent from its 52-week high of Rs 447.75 per share. In the last one year, the stock has delivered a negative return of 12 percent.
On Friday, Jefferies said that they have downgraded their stance to “Underperform” from “Buy,” citing several degrowth drivers. The brokerage had earlier assigned a price target of Rs 500 per share, but now assigned a target of Rs 315 per share, which is a massive 37 percent cut.
It cited that it sees a major downside for the giant after Meesho’s move to bring logistics operations in-house, which may hurt Delhivery’s third-party (3PL) express parcel segment.
Also, the recent rally seen after Delhivery acquired Ecom Express is now expected to see slower growth than usual. The brokerage expects its industry volumes to grow at a CAGR of 10 percent between FY25 – FY30, which is down from 30 percent between FY20 – FY25.
Financial Highlights
Delhivery reported a consolidated revenue of Rs 8,932 crores in FY25, up 9.71 percent from Rs 8,142 crores in FY24. It reported a net profit of Rs 162 crores in FY25 as compared to a loss of Rs 249 crores in FY24.
During FY25, the express parcel segment was the highest contributor to the top line with 60 percent, followed by the PTL (Part truckload) segment with 21 percent, the TL(Truck Load) segment with 7 percent, and the SCS (Supply Chain Services) segment with 10 percent, and the rest of the revenue comes from its cross-border segment.
The stock delivered a poor ROE and ROCE of 1.80 percent and 2.72 percent respectively, and is currently trading at a P/E of 157.04x, much higher than its industry average of 26.55x.
Delhivery is India’s largest fully-integrated logistics services provider. With its nationwide network covering over 18,833 pin codes, the company provides a wide range of logistics services such as express parcel transportation, PTL freight, TL freight, cross-border, supply chain, and technology services.
Delhivery has successfully fulfilled over 3.4 billion shipments since inception and today works with over 33K+ businesses served, including large & small e-commerce participants, SMEs, and other enterprises & brands.
Written by Satyajeet Mukherjee
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